KUALA LUMPUR (July 26): Shares in electronics manufacturing services firm Cape EMS Bhd (KL:CEB) fell to a new all-time low on Friday, and the sharp decline triggered suspension of intraday short-selling activities.
The stock fell as much as 19 sen or 22% to 69 sen in early trades. The stock paused for the midday trading break at 74 sen, down 16%, on course for the biggest single-day decline in five years. Trading volume totalled 86.89 million shares, nearly seven times the 20-day moving average.
Intraday short-selling will be suspended when the last price of an approved stock falls more than 15%, or 15 sen, from the previous day’s price. Intraday short-selling of Cape EMS shares will only be allowed to resume next Monday (July 29).
The company is aware of the selling pressure on its share price, Cape EMS managing director and chief executive officer Christina Tee told The Edge. Profit-after-tax growth will likely be partly affected by the increase in cost and expenses in the financial year ending Dec 31, 2024 (FY2024), she noted.
“However, our company’s profit margin is still very healthy” in the sector, she stressed.
Still, revenue is expected to continue to increase “strongly” this year and in 2025, on orders from new and existing customers, Tee said, adding that “our customers are all in very positive” industries, such as green energy and data centres with strong growth.
The decline on Friday would be the fourth consecutive day for Cape EMS, pushing the stock 18% below its initial public offering price (IPO) of 90 sen per share barely 16 months ago. Based on its last price, the Johor-based company now has a market capitalisation of RM734 million.
Cape EMS mainly assembles products for industries ranging from wireless communication to electric vehicles. The company also provides precision aluminum die casting, and precision machining for enclosures and components.
The company is slated to release its second quarter results by next month. In the first quarter ended March 31, 2024 (1QFY2024), net profit jumped 58% to RM13.41 million from RM8.5 million a year ago, on better performance from both industrial and consumer segments.
Quarterly revenue increased more than 12% to RM154.48 million from RM137.35 million, after the group saw increased demand for its products, particularly in wireless communication equipment, electronic cigarettes, and light electric vehicle segments.
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